US-China tech war: Beijing’s efforts to catch up in advanced chips on hold as country’s attention turns to mature nodes
- Only TSMC, Samsung and Intel have stayed in the race below 10nm, so it makes sense for Chinese firms to focus resources on mature chip tech, say analysts
- In recent years Chinese suppliers have made some progress in developing high-end photoresists, key materials used in the lithography process
China has been forced to make a course correction in its drive for semiconductor self-reliance, focusing instead on boosting production of mature technologies while putting the goal of catching up with the world’s most advanced chip makers on the back burner, according to analysts and industry insiders.
The shift offers a cautionary tale on Beijing’s quest to cut its reliance on American technologies. Despite strong political will from President Xi Jinping, generous financial support from the government, and the enthusiasm of domestic players, China is facing the harsh reality that its chances of becoming self-sufficient in advanced chips are remote.
On the one hand, China is able to ease the supply shortage by boosting production of lower end chips used in automobiles and home appliances, but on the other, it has to rely on wafer fabs such as Taiwan Semiconductor Manufacturing Co (TSMC) and Samsung Electronics for advanced chip manufacturing in the coming years, if not decades, even if China’s own IC design firms are able to design these high end chips.
“In the leading edge, it is going to become more difficult for Chinese companies to catch up,” Gokul Hariharan, co-head of Asia-Pacific TMT Research at US investment bank J.P. Morgan, said in an interview with the South China Morning Post. However, he added that the market for older generation technology remains promising and Chinese companies have potential there.
Shanghai-based Semiconductor Manufacturing International Corp (SMIC), the country’s most advanced fab, can produce 14nm node chips, and is building new plants in Beijing and Shenzhen for 28nm node technology chips. While demand for these more mature technology nodes is strong, SMIC is several generations behind advanced players when it comes to the leading edge.
